California Dialysis Council   1904 Naomi Place • Prescott, AZ 86303 • Phone: 928-717-1156 • Fax: 928-441-3857    NEWS   UPDATE GOVERNOR SCHWARZENEGGER’S  ANNOUNCES  HEALTH CARE REFORM PLAN This link will provide you with a copy of the Governor’s health reform package which was unveiled yesterday. The Governor’s plan will be considered by the Legislature along with several other proposals now under consideration. We will keep you apprised as the situation changes here in Sacramento. MedPAC RECOMMENDATION:  1.2 PERCENT UPDATE FOR 2008 AND EMPHASIS ON BUNDLING This afternoon, MedPAC voted on the draft recommendation for the dialysis payment update in FY2008 that will be included in their March 2007 Report to Congress.  The Commissioners unanimously approved a recommendation that Congress update the  composite rate by the projected rate of increase in the ESRD market basket in 2008 (2.5%) minus one-half the projected productivity adjustment (1.3%).  The net recommended update is 1.2 percent. The recommendation followed a review by Ms. Nancy Ray of the December 8, 2006, session on the adequacy of reimbursement for Medicare ESRD services, as detailed in the attached slides.  Notably, she indicated that the proportion of ESRD patients who had their anemia under control increased from 74 percent in 2000 to 83 percent in 2004.   She also acknowledged the growth in erythropoietin doses and suggested that bundling drug payments may address this concern. The projected 2007 Medicare combined services and drugs margin changed slightly since the December session due to the recently passed "Tax Relief and Health Care Act of 2006," which increased payments starting in April 2007.  It now stands at 4.1 percent, or 1 percent without the audit correction.  On this point, she also noted that the chains have the largest margins due to higher drug utilization and lower costs. Ms. Ray closed by reminding the Commissioners of the recommendations they made regarding quality incentives for dialysis services in their June 2006 Report to Congress.  She again noted that there are widely available measures based on existing data sources such as vascular access, hospitalizations, and mortality.  Finally, she reminded the Commissioners of their 2005 recommendations to Congress to: * Combine the composite rate payment and the add-on payment; and * Eliminate differences in paying for composite rate services between hospital-based and freestanding dialysis facilities. Commissioner Questions Commissioner Nancy Kane inquired as to why there is not an annual update for dialysis services as there is for other payment systems.  A number of the Commissioners chuckled and Chairman Glenn M. Hackbarth acknowledged that it was a question the Commission has faced for a number of years.  However, he stated that he would prefer for none of the payment models to have automatic updates so that they could be reviewed on an annual basis. Commissioner Ronald Castellanos noted that Medicare pays for nutritional counseling for patients not on dialysis, but not for those receiving treatment.  He asked why this was the case.  Ms. Ray explained that facilities are expected to pay for those services as part of the composite rate, though she acknowledged that the feasibility of doing so could be an area of inquiry for the Commission.  Commissioner Nancy-Ann DeParle reiterated her long-standing concern in this area.  Additionally, she stated that the Commission should recommend payment for nutritional therapies in addition to expecting facilities to provide counseling.  Because the Commission is opposed to separately billing for components of service, she suggested enhancing the composite rate and requiring facilities to provide appropriate nutritional therapies.  Vice Chairman Robert Reischauer and Commissioner Sheila Burke suggested they include nutritional measures in their pay-for-performance recommendations so they can have a basis upon which to base a later recommendation. Finally, Chairman Hackbarth reiterated his continued support for bundling and directed the staff to ensure the report language was as strong as possible.  Click here for as copy of the MedPac slides. California Dialysis Council   1904 Naomi Place   Prescott, AZ 86303-5061   ' (928) 717-1156   7 (928) 441-3857   + mail@caldialysis.org   ü http://www.caldialysis.org  "Serving the California Dialysis Community since 1982"